Implementing ARPA on Healthcare.gov

Implementing the American Rescue Plan Act (ARPA) is a big, fast challenge.  One of the major health policy changes is the expansion of eligibility for ACA subsidies as well as increasing the richness of those subsidies for people who were receiving subsidies under the previous iteration and implementation of the law.  This includes changing the applicable percentage of income for the benchmark plan;  people who earned 150% FPL (~$18,000/year for a single person) had previously paid over 4% of income ($60/month) for a benchmark silver plan.  Now they pay nothing for the benchmark plan.  These types of changes go up and down the income scale.

These are big changes.

CMS has sent out an initial expectation guidance on Friday.

Increased premium tax credits based on the lower income contribution percentage along with expanding tax credit access to consumers with household incomes above 400%, will be available through HealthCare.gov starting on April 1. This means that new consumers and current enrollees who submit an application and select a plan on or after April 1 will receive the increased premium tax credits for 2021 Marketplace coverage.

Extra tax credits for consumers receiving unemployment compensation will be available starting this summer.

• If I’m currently enrolled in a Marketplace plan, how do I receive the additional tax credits/lower premiums?

Current enrollees, including those who recently enrolled through the 2021 Special Enrollment Period, can update their applications and enrollments in order to get new eligibility results starting April 1. You will need to reselect your current plan in order for the changes to take effect to reduce your premiums for the remainder of the year.

While the 2021 SEP opportunity is available through May 15, current enrollees can decide during the SEP opportunity if they may want to change to a new plan for the rest of the year. You should consider how much you’ve already paid toward your deductible when deciding whether or not a change in plan makes sense for you.  When you change plans, the amount you’ve paid already towards meeting your prior plan’s deductible may be reset to zero, and you would need to start over paying out of pocket expenses to reach the deductible on your new plan.

The intent on implementation is for people to enroll now and fix the subsidies over the course of the year. Most notably, for people who are currently enrolled, go back into Healthcare.gov and update your information and your plan choice after April 1.

The safety net for the mid-year subsidy update will be the 2022 tax filing season. People who were eligible for the new subsidies and who do nothing to activate them for 2021 will be able to get a bigger tax refund next spring.

It seems that the priority of CMS is to get the system updated first for people who are coming onto the marketplaces for the first time and then to get it ready for the 2022 plan year Open Enrollment in November.  After that, the standard call for people to make active choices is in play.

As a side note, if anyone either utters the word “simple” near an actuary or impedes an actuary’s path to the coffee pot, I will not condone what they do to you, but I will understand their motivation.